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More visionary minimalism, this time on housing


The White House Version 2.0 mortgage-relief plan announced on Friday is a recognition that the moribund housing sector poses a grave threat to the nation's economic recovery. By the administration's own admission, however, the effort may save at best only a third of the homes facing foreclosure in coming years.

The White House was careful not to raise expectations too high, noting that up to 12 million foreclosures still could occur during the next three years. The new program seeks to help at most 4 million of those homeowner

The new program captured headlines Thursday night when word leaked of help to unemployed homeowners. Once the details came out Friday, however, it delivered less than expected.

Well, not for everybody. Some of us are cynical realistic enough. Read on for the best part:

Lenders and loan servicers who participate in the government's program are required to offer temporary relief, but it'll be help for a limited universe. First, borrowers must seek this help, must be collecting unemployment insurance and must be less than 90 days late on their mortgage payments.

That appears to exclude many of the record 6.1 million Americans who have been jobless for 27 weeks or longer.

So, those who need help the most get the list. Ya know, it's starting to look like this administration always throws somebody under the bus, no matter what, and it's always the weakest.

Obama really is a Republican, isn't he?

NOTE So, we're what, two years into the worst recession since the 1930's and these FKDP shitheads unveil a plan that helps only a third of those who need it? WTF? Remember how the banksters got help NOW NOW NOW? $700 billion in a matter of days? Yeah, me too.

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mass's picture
Submitted by mass on

is a very centrist approach? I mean, it's pragmatic, you see. Now there are those on the Left who think all home owners should be helped, but Obama is a realist.

Seriously, they are only helping those on unemployment 90 days or less? What the hell is that? I guess the other are too pathetic to save or something. Lost causes? What a heartless bunch these people are.

Submitted by lambert on

The Rs just straight out say "kill the weak."

The Ds have the same policy goal, but they attribute the outcomes to impersonal forces that they can't control.

letsgetitdone's picture
Submitted by letsgetitdone on

We know what Obama is. Now we have to get someone better in.

Submitted by jawbone on

perhaps his only term, but he has stated he wants to take on entitlements, SocSec and Medicare. SocSec will be up soon -- we need to try to stop him doing something really bad for waht remains of our social safety nets.

He was selected by the Money Men to do a job -- he has to deliver SocSec to their money grubbing hands.

Rangoon78's picture
Submitted by Rangoon78 on

Hillary 2007:
"America needs a plan that matches the scale of the crisis, and President Bush has failed to deliver it. But that is what happens when you are more interested in protecting corporate interests than struggling families.

"I have announced a comprehensive plan that will actually end the foreclosure crisis. My plan imposes an immediate moratorium on foreclosures; an automatic, across-the-board rate freeze; and the requirement that servicers and lenders provide status reports on how many mortgages they are converting from designed-to-fail to designed-to-work. The foreclosure moratorium ensures that families will not lose their homes while servicers put the systems in place to implement the rate freeze as well as the large-scale modification of loans. And the automatic, across-the-board rate freeze will ensure that hundreds of thousands of families, rather than just a few, will be spared the foreclosure process.

"I call on the mortgage industry and Wall Street to go back to the drawing board, and to do so with a commitment to helping families and not just themselves. A voluntary agreement that fixes this problem is possible. But if the mortgage industry and Wall Street will not shoulder their responsibility, then I will consider legislation to protect servicers and others who do the right thing by modifying loans to help families save their homes, help investors avoid losses, and help the economy."

and from BTD at TalkLeft:

Remember HOLC? Via Atrios, Rep. Brad Miller (D-NC) is talking about it again:

If the government could purchase, either by voluntary sale or by eminent domain, distressed mortgages for 30 to 50 cents on the dollar, there would be ample room to reduce the principal to make the mortgage affordable. In other cases, the government could buy the home in exchange for cancelling the mortgage and enter into a long-term lease with the former homeowner.

[. . .] The Obama administration can establish a new HOLC without any additional action by Congress. The Troubled Assets Relief Program (TARP) legislation already gives the Treasury Department the power to acquire financial assets, specifically mortgages, and Treasury could fund the program with the $75 billion of the TARP appropriation allocated for HAMP.

The time for a new HOLC was last year. But better late than never.

Submitted by Lex on

If the last step of the process goes according to plan, i just got a mortgage backed by the government (i'm a socialist, so this doesn't bother me in the least) under eye-wateringly good terms: 0 down, no PMI, 5% fixed, 30 years. My bank holds the mortgage, my bank collects the interest. The government is only involved if i default.

So i have to wonder why a scheme like this wasn't implemented to solve the crisis initially. There was no need to adjust principal on these mortgages. Most people had already been paid in full for them, the seller, the originating institution, etc.

The government could have offered new mortgages through local/regional banks (who wouldn't have had to give anyone any money to take on the mortgages), adjusting for any payment against principal and on a current appraisal. Write the new mortgages at 6% or something, with the bank taking most of those points and the government getting 1 or 2% for its trouble.

No actual money would have been harmed unless there was a default. Local banks would have gotten a capital injection to use. And homeowners would have gotten decent mortgage terms that would allow them to stay in the home.

I'm not a banker or a politician, so there might be holes in my idea. But it seems like this sort of scheme would treat the disease rather than the symptoms and would have cost the government (people) a lot less than paying for all the securities gone bad.

In fact, i'd call a plan like the one above the pragmatic, realist way to approach the problem...but i guess i'm not in Wall Street's back pocket so i've got a funny idea of pragmatism.